Local Business Taxes
Unincorporated Area of Montgomery County
Descriptions of the major local business taxes levied within unincorporated areas of Montgomery County are as follows.
Real Estate Tax
The Code of Virginia, §§ 58.1-3200 through 58.1-3389, authorizes localities to levy taxes on real property (land, including the buildings and improvements on it).
Real estate is assessed based on 100 percent of fair market value. Because of rising real estate values and periodic reassessments by localities (every four years in Montgomery County), actual assessment ratios usually are lower than 100 percent. The
last assessment was done in 2014.
Real Estate Tax rates are levied per every $100 of assessed value and are as follows:
| | Blacksburg/Christiansburg | N/A |
| | Montgomery County | $0.75 |
| | Total | $0.75 |
Effective Rate: If a real estate property had an assessed value of $100, the total local tax levied upon the property by Montgomery County would be $0.75 ($100 / 100 x $0.75).
Machinery & Tools Tax
Under § 58.1-3507 of the Code of Virginia, certain machinery and tools are segregated as tangible personal property for local taxation. According to the Code, the classes of machinery and tools that are segregated are those that are used for “manufacturing,
mining, processing and reprocessing (excluding food processing), radio or television broadcasting, dairy, and laundry or dry cleaning.”
Businesses subject to the machinery and tools tax (i.e. manufacturers) ARE NOT subject to tangible personal property tax on office equipment, furniture or fixtures.
The value of Machinery & Tools is assessed on a declining scale in Montgomery County. Therefore, the assessed value of Machinery & Tools actually declines over time. The depreciation schedules for Machinery & Tools are
as follows:
Machinery & Tools Depreciation Schedule
Years 1 to 4: Property assessed at 60% of their purchase value.
Years 5 to 7: Property assessed at 50% of their purchase value
Years 8 and beyond: Property assessed at 40% of their purchase value.
Machinery & Tools tax rates are levied per every $100 of assessed value and are as follows:
| | Blacksburg/Christiansburg | N/A |
| | Montgomery County | $1.82 |
| | Total | $1.82 |
Effective Rate: If a property classified as Machinery & Tools was purchased for $100, the first year's tax on the property would be $1.09 ($100 x 60% / 100 x $1.82)
Tangible Personal Property Tax
Cities, counties, and towns may levy a tax on the tangible personal property of businesses and individuals pursuant to the Code of Virginia, §§ 58.1-3500 through 58.1-3521. Items considered tangible personal property include, but may not
be limited to, the following:
- Motor Vehicles (i.e. automobiles, trucks and motorcycles)
- Furniture & Fixtures and Equipment NOT APPLICABLE to manufacturers
- Programmable Computer Equipment
- Tractors, Trailers and Heavy Construction Equipment
Businesses subject to the machinery and tools tax (i.e. manufacturers) ARE NOT subject to tangible personal property tax on office equipment, furniture or fixtures.
The value of tangible personal property is assessed on a declining scale in Montgomery County. Therefore, the assessed value of tangible personal property actually declines over time. The depreciation schedules for tangible personal property are
as follows:
Furniture & Fixtures and Equipment not applicable to manufacturers
Year 1: Property assessed at 80% of purchase value.
Year 2: Property assessed at 70% of purchase value.
Year 3: Property assessed at 60% of purchase value.
Year 4: Property assessed at 50% of purchase value.
Year 5: Property assessed at 40% of purchase value.
Years 6 and beyond: Property assessed at 30% of purchase value.
Programmable Computer Equipment
Year 1: Property assessed at 80% of purchase value.
Year 2: Property assessed at 70% of purchase value.
Year 3: Property assessed at 50% of purchase value.
Years 4 and beyond: Property assessed at 10% of purchase value.
Registered Motor Vehicles (i.e. automobiles, trucks and motorcycles)
Automobiles that are registered with the Virginia Department of Motor Vehicles are valued according to the listed values in the National Automobile Dealers’ Association’s Official Used Car Guide (NADA). If the model and year of the vehicle
are not listed in the pricing guide, the value is based on following depreciation schedule:
Unregistered Trucks, Tractors, & Trailers or Heavy Construction Equip.
Year 1: Property assessed at 80% of purchase value.
Year 2: Property assessed at 60% of purchase value.
Year 3: Property assessed at 50% of purchase value.
Year 4: Property assessed at 30% of purchase value.
Year 5: Property assessed at 20% of purchase value.
Years 6 and beyond: Property assessed at 10% of purchase value.
Tangible personal property tax rates are levied per every $100 of assessed value. Tax rates for tangible personal property are as follows:
| | Blacksburg/Christiansburg | N/A |
| | Montgomery County | $2.55 |
| | Total | $2.55 |
Effective Rate: If a piece of computer equipment was purchased for $100, the first year's tax on the property would be $2.55 ($100 x 80% / 100 x $2.55)The
Personal Property Tax Relief Act of 1998 provides tax relief on the first $20,000 of value for qualifying vehicles.
Qualifying vehicles include passenger vehicles, motorcycles and pickup and panel trucks with a gross weight of 7,500 pounds or less that are predominantly used for personal use and are either privately owned or leased where the lessee pays the personal
property tax.
Business, Professional, Occupation License (BPOL) Tax
Localities are authorized to impose a local license tax on businesses, professions, and occupations operating within their jurisdictions unless they already levy a tax on merchants’ capital.
Montgomery County does not issue Business, Professional, Occupation Licenses. However, if a company located in an unincorporated area of Montgomery County wishes to conduct business in the Town of Blacksburg or Christiansburg,
it may need to obtain a Business, Professional, Occupational License from the applicable town.
Consumer Utility Tax
The Code of Virginia, § 58.1-3812 and § 58.1-3814, authorizes localities to impose a tax on the consumers of public utilities. Local Consumer Utility Tax Rates are as follows:
| Montgomery County: See Below |
| | Commercial/Industrial Electrical | 20% of monthly bill up to a $20.00 maximum tax |
| | Commercial/Industrial Natural Gas | 20% of monthly bill up to a $20.00 maximum tax |
Meals Tax:
Localities may levy a meals tax on food and beverages offered for human consumption. The meals tax is a flat percentage imposed on the price of a meal. Local tax rates are as follows:
| | Blacksburg/Christiansburg | N/A |
| | Montgomery County | 4.0% |
| | Total | 4.0% |
Effective Tax: If a meal were to cost $100, the total tax levied on the meal would be $4.00 ($100 x 4%).
Transient Occupancy Tax
Localities may levy a tax on the charge for the occupancy of any room or space in hotels, motels, boarding houses, travel campgrounds, and other facilities providing lodging for less than thirty days. The tax applies to rooms intended or suitable
for dwelling and sleeping. Therefore, the tax does not apply to such rooms used for alternative purposes, such as banquet rooms and meeting rooms.
The transient occupancy tax is a flat percentage imposed on the charge for the occupancy of any room or space in hotels, motels, boarding houses, travel campgrounds, and other facilities providing lodging for less than thirty days. Local tax rates
are as follows:
| | Blacksburg/Christiansburg | N/A |
| | Montgomery County | 3.0% |
| | Total | 3.0% |
Effective Rate: If a hotel room were to cost $100, the total tax levied on the purchase would be $3.00 ($100 x 3%).
State Business Taxes
Business Taxes Levied by the State of Virginia. View